Axios HQ, the tech arm spun out from Axios Media in 2022, is now profitable and driving $20 million in annualized revenue, following a series of strategic moves to simplify its business, CEO Roy Schwartz tells Axios in an interview.

Why it matters: Launched in 2021, Axios HQ faced an existential threat with the rise of generative AI. Schwartz credits simplifying the company's structure with helping position the brand for growth.

• "We were very aware of what AI can suddenly make obsolete, so we started pivoting," he says.

Zoom out: Axios HQ's pivot is the byproduct of a strategy championed by Axios Media's co-founders, Schwartz, Jim VandeHei and Mike Allen, around radically simplifying one's goals and operations to achieve more success.

• Today, the trio published their second co-written book, "Simplify: Do 50% More With 50% Less," which explores that idea.
• In an interview, VandeHei says corporate leaders recognize they need "some kind of operating manual to deal with what feels like life and emotional paralysis" in the AI era.

State of play: Initially, HQ was mostly focused on selling software, but now services is the company's fastest-growing business line, Schwartz says.

• Revenue is almost equally split between the two offerings.

Between the lines: To become profitable and grow sustainably, Axios HQ simplified its structure, Schwartz says.

• The company today employs around 45 people, down from 120 at its peak, and is much more profitable. Schwartz projects margins of roughly 20%–25% this year.
• Axios Media has similarly simplified its business, VandeHei says, noting moves to cut its subscription policy offering and certain editorial verticals, such as sports.

The big picture: The rise of AI has forced companies to confront pain points in their structures and supply chains in order to stay competitive.

• The book "Simplify" is intended to help companies by providing a common language, framework and playbook for their initiatives, Schwartz says.

Editor's note: This item was corrected to reflect Roy Schwartz said the book "Simplify" (not changes to Axios HQ) would help companies by providing them with a common language, framework and playbook.

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Village Media, one of Canada's largest digital-only local news networks, is launching an AI-powered community services tool via a partnership with OpenAI.

Why it matters: It marks OpenAI's first news deal in Canada.

Zoom in: The partnership will see Village Media and OpenAI teaming up to launch Open Door, an AI-powered community health and care navigation platform.

• The product is built by Village Media's Cares team, which leads community-support initiatives across its local markets.
• It connects residents to assistance programs within their communities, such as emergency food relief groups or safe housing organizations.
• The tool, which will launch in Sault Ste. Marie, Ontario, draws from a curated directory of more than 200 community organizations across 24 categories of support, per Village Media.

Between the lines: While the product is built with support from OpenAI, Village Media owns Open Door, a spokesperson said. The OpenAI deal includes a mix of funding, API credits and technical support.

• As part of the agreement, Village Media's content is also cited in ChatGPT. A spokesperson said, "We consider the overall balance of the agreement to be fair."

🤖 Zoom out: While OpenAI has long said efforts to partner with local news companies — including Axios — support its broader mission, it's worth noting that Big Tech platforms face intense scrutiny in Canada.

• Meta has blocked news in Canada since 2023 in response to the government's Online News Act, which requires large tech companies to pay publishers for their content.
• OpenAI is not subject to that legislation, but it is required to comply with other Canadian regulations around digital safety and privacy measures.

📰 The big picture: OpenAI has invested heavily in local news partnerships while simultaneously facing lawsuits over copyright infringement from newspapers such as the New York Times and eight newspapers owned by Alden Global Capital.

• It recently renewed its investment in the American Journalism Project by committing an additional $5 million in funding and $3 million in tech credits to the organization over the next two years.
• It struck a three-year deal with Axios in 2025 to fund its local news expansion.

What to watch: Village Media is considering ways to extend Open Door to communities beyond where it currently has an existing publication, a spokesperson noted.

A wave of steep cuts across major local media companies in recent weeks underscores the challenges facing traditional media outlets amid AI-driven changes to search and media economics.

State of play: More than 90 McClatchy journalists were laid off last week, accounting for more than 30% of the newspaper giant's staff that's unionized with the NewsGuild-CWA.

• McClatchy journalists across more than a dozen outlets, including the Charlotte Observer, Idaho Statesman and Kansas City Star, were cut. Meanwhile, fears over ways AI could replace journalists have intensified.
• USA Today Co., formerly Gannett, also cut jobs earlier this month, citing waning search traffic.
• E.W. Scripps laid off 12% of its workforce in August amid a push to embrace AI. The cuts occurred mostly at the company's local TV stations.
• Lee Enterprises, one of the largest independent local newspaper companies, made cuts across some of its local newsrooms last month.

The big picture: Even barring political ads, local media spend is projected to increase this year, according to new estimates from BIA Advisory Services. But most of that growth is stemming from digital advertising against Big Tech platforms on mobile.

• Now that AI search interfaces are adding advertising, traditional local news outlets are facing even more competition for dollars from small local businesses.

Three of the biggest names in streaming on Monday announced the formation of a policy coalition to advocate for their interests on key issues.

🏈 Why it matters: Over the past year, government regulators have scrutinized sports leagues moving their rights to streaming, prompting streamers that aren't attached to broadcast networks to come together to advocate for their shared interests.

Zoom in: The Streaming Access and Choice Alliance launched Monday with Amazon, Netflix and YouTube as its founding corporate members.

• The alliance is led by TechNet, a trade group that represents Big Tech companies.

📺 The big picture: Earlier this year, the Department of Justice and the FCC opened an inquiry into whether the Sports Broadcasting Act of 1961, which allows leagues to pool and sell TV rights collectively, should be revisited.

• FCC chair Brendan Carr questioned whether too many sports rights are moving over to paywalled streaming services as a result of an antitrust exemption granted to sports leagues as part of that law.

⏮️ Catch up quick: Netflix, Amazon and Google were all part of a previous trade group called the Internet Association that dissolved in late 2021 once it became clear its members' interests were too dispersed.

• Netflix joined the Motion Picture Association that year, a signal that its interests were becoming more aligned with Hollywood in some cases than Silicon Valley.

Zoom out: Because the biggest streamers are mostly owned by corporate parents with a diverse set of interests, there isn't a single trade group set up to represent their interests.

• Coalitions, which tend to arise in response to specific issues, are used by streamers to address particular lobbying challenges.
• The industry's first major coalition, the Streaming Innovation Alliance, helped streamers challenge local broadcasters on a regulatory loophole in 2023.

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Wired, the tech publication owned by Condé Nast, is launching a global app this week that will feature a more personalized and interactive experience aimed at its most loyal readers.

👀 The intrigue: Noticeably absent from Wired's new app is an AI interface or chatbot.

• Wired's global editorial director Katie Drummond said she didn't see any value in readers talking to a robot.
• "I really think that some publishers are overestimating the degree to which users want to spend time with them in the context of a robotic conversation. I think people want to connect with people, and that's our bet."

Zoom out: With traffic referrals declining in the AI era, Drummond says she wants the brand to focus on serving fewer, more engaged readers who can interact with its journalists on its own platforms.

• "Ultimately, I am very comfortable with the idea that Wired's audience in the future is a smaller audience, but we want that audience to be loyal," Drummond said in an interview.

Between the lines: The app is free to download. For a short time, anyone can access Wired's content through the app, but after Nov. 9, only a limited set of content will be available to non-subscribers.

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Apple TV dominated the "78th Primetime Emmy Awards" Monday, racking up 28 wins — the most for any platform.

Why it matters: Prestige has given Apple TV an outsized cultural footprint compared to its actual penetration and distribution.

🚣 Zoom in: Apple's wins were mostly concentrated across its dark comedy "Widow's Bay" (14 wins) and its sci-fi drama "Pluribus" (six wins).

• 🏥 HBO and HBO Max took home 21 awards, mostly for its limited series "DTF St. Louis" and its hospital drama "The Pitt."
• 🥩 Netflix took home 16 prizes across a wide array of shows, including "Beef" and "Love on the Spectrum."
• 📊 Prime Video earned 10 awards. All other traditional networks and their streamers, including Disney+, Hulu, FX, NBC, Peacock, CBS, Fox, ABC and others, took home fewer than 10 awards each.

The big picture: Big Tech has come to conquer prestige TV, with more and more awards moving toward streamers like Apple TV, Amazon and Netflix.

• This year, Big Tech firms took home 45% of all awards, compared with 18% in 2017.

🍿 What to watch: The Emmys currently rotates between the four major broadcasters — Fox, ABC, CBS and NBC — each year. The show's eight-year broadcast contract expires this year.

• On Tuesday, Variety reported that the show was in talks to move its distribution to Amazon Prime Video, which would take the program off broadcast for the first time in decades.
• The Oscars will move from ABC to YouTube beginning in 2029.